Weak downstream market mutes the demand of Chloroform in the global market
- 29-Apr-2022 4:54 PM
- Journalist: Nicholas Seifield
Chloroform prices slipped over the past few weeks due to a sharp fall in the raw material Methanol market in the Asian region. Despite surging Natural Gas and crude oil prices due to the Russia-Ukraine conflict, tepid demand from the downstream refrigerant ventures reduced the prices. Weakening demand was impacted due to the general slowdown of market trading activities amid economic uncertainty and port congestion in China.
The sufficient supply of products in India affected the export market of China. It was heard that, except for Dongyue, Jinling Dawang, and Fuqiang plants, which continued to stop, other Methane chloride plants operated at a high operating rate with deterred production costs among the enterprises. In April, the price of feedstock Methanol fell to USD 425/ton, down by 8.6% compared to the first week of April, where prices were USD 466/ton. Downstream refrigerant enterprise's sales and revenue remained sluggish with weak cost support. With the completion of Dongyue maintenance, the supply of refrigerant R22 surged, and the stockpiling of the product fell in the market. In China, the price of Chloroform slipped to USD 864/ton FOB Qingdao on 22nd April.
In the United States, the price of Chloroform was lowered in April to USD 762/ton Spot Ex-Texas with a monthly declination of 1.03%. Despite surging feedstock Methanol prices in the regional market, the prices fell due to deteriorating demand from downstream refrigerant enterprises. On 20th April, Olin Corporation declared force majeure on Chlorine, caustic soda, and ethylene dichloride. The declaration comes after a compressor fire resulting in a Chlorine leak at a Louisiana plant. The plant had a production capacity of 850KTPA of Chlorine and 748KTPA of Ethylene Dichloride, and plant turnaround will affect the prices of Chloroform in the US market.
According to ChemAnalyst, the price of Chloroform will remain weak in the upcoming weeks in the Asian market. The feedstock Methane chloride market is expected to remain feeble, affecting the downstream refrigerant industries. However, in the United States, Chloroform's price will surge with a major turnaround of the Olin Petrochemical plant fluctuating the prices of raw materials Chlorine and Methane. Demand from downstream enterprises is expected to remain tepid with the consumption of existing inventories and accelerating demand for the new stocks.